Modi government is confident about it getting the second term. Most of the policies designed by the government give a glimpse of a long term agenda, at least till 2022. Taking another step in that direction, the government has decided to present a full year budget for the next fiscal starting from April 1. This term of Modi government ends in the month of May next year and therefore, speculations were rife about the presentation of an interim budget. But defying the precedent, Modi government has implicitly signaled confidence to get a second term and is set to present a full budget. The next fiscal budget is expected to be presented on February 1, 2019, with this being the sixth and final budget of this term of Modi government.
Previously, government advanced the budget day to February 1 in order to provide more time to different ministries to spend the allocated funds, with the spending beginning before the monsoon itself. Earlier, the budget was presented in the last week of February or in the initial weeks of March and therefore, the spending used to get delayed by 1 or 2 months from the beginning of financial year. The experts were of a view that a 2.6 trillion dollar economy will not be able to afford significant changes due to a new government takeover and giving this heed, the government decided to present a full-budget. “As long as no major policy changes including tax policy are undertaken in the budget and expenditure approval is taken for the relevant period, then it would be an appropriate approach,” said D.K. Srivastava, chief policy adviser at EY India.
The officials presented the view that continuity in policies will be good for country’s economy. “We will signal continuity. We cannot dislocate the economy just because of the elections. Wherever there is gap in expenditure, we will plug it,” said a government official.
The government also plans to stick to other routines like publishing Economic Survey which is a report card of economic performance of the country in the ongoing fiscal. The government has formed a committee under the leadership of former RBI governor and CEA, Bimal Jalan as the post of Chief Economic Advisor lies vacant since Arvind Subramanian resigned sighting family reasons. According to sources, Poonam Gupta, lead economist for India at World Bank and former RBI chair professor at the National Institute of Public Finance and Policy (NIPFP) could be first female CEA of the country. Gupta is a top-notch academician and has written many books in collaboration with economists like Barry Eichengreen. Gupta comes with prior experience of working with global institutions like her predecessor Arvind Subramanian who had worked with the IMF and Raghuram Rajan who was the chief economist at IMF.
The government has also advertised for a post of senior economic advisor to finance ministry and this can be seen as a step to strengthen the research potential of the North Block. Currently, the government has only one economic advisor- Sanjeev Sanyal who is Principal Economic Advisor to the Finance Ministry. The government has restricted the entry of journalists in the North Block as budget preparation gains momentum. “Letters have already been sent to departments to submit revised estimates for 2018-19 and budget estimates for 2019-20. We may also hold consultations with industries and various stakeholders to understand their expectation from the budget,” said a government official. The full term budget preparation by Modi government shows that it is very confident and sure about the developmental drives it has carried throughout the nation to pay off.